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Not Whether, but Where? Pell Grants and College Choices

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Abstract

Pell grants are the largest financial aid vehicle in the United States, and yet, their role in shaping students' college choices is not clear. Drawing on the enrollment decisions of four cohorts of Tennessee high school graduates and discontinuities in Pell eligibility as a function of federal formulae, we find little evidence that marginal Pell eligibility affects whether or where students enroll in college. Inframarginal estimates suggest that students sort into colleges with 12 - 14 cents higher tuition per dollar of Pell aid, although other measures of college quality do not significantly improve over the counterfactual.

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  • Celeste K. Carruthers & Jilleah G. Welch, 2015. "Not Whether, but Where? Pell Grants and College Choices," Working Papers 2015-04, University of Tennessee, Department of Economics, revised 28 Sep 2015.
    • Handle: RePEc:ten:wpaper:2015-04
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    File URL: http://web.utk.edu/~ccarrut1/CarruthersWelch_SEPT2015.pdf
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    Cited by:

    1. Jeffrey T. Denning & Benjamin M. Marx & Lesley J. Turner, 2019. "ProPelled: The Effects of Grants on Graduation, Earnings, and Welfare," American Economic Journal: Applied Economics, American Economic Association, vol. 11(3), pages 193-224, July.
    2. Stephanie R. Cellini & Rajeev Darolia & Lesley J. Turner, 2020. "Where Do Students Go When For-Profit Colleges Lose Federal Aid?," American Economic Journal: Economic Policy, American Economic Association, vol. 12(2), pages 46-83, May.
    3. Benjamin M. Marx & Lesley J. Turner, 2015. "Borrowing Trouble? Student Loans, the Cost of Borrowing, and Implications for the Effectiveness of Need-Based Grant Aid," NBER Working Papers 20850, National Bureau of Economic Research, Inc.
    4. Michael S. Kofoed, 2017. "To Apply or Not to Apply: FAFSA Completion and Financial Aid Gaps," Research in Higher Education, Springer;Association for Institutional Research, vol. 58(1), pages 1-39, February.

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    More about this item

    JEL classification:

    • I22 - Health, Education, and Welfare - - Education - - - Educational Finance; Financial Aid
    • I23 - Health, Education, and Welfare - - Education - - - Higher Education; Research Institutions
    • H75 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Government: Health, Education, and Welfare

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